HIGHLIGHTS OF EXIM POLICY, 2002-07 of India

Ministry of Commerce & Industry, Government of India

I- Special Economic Zones (SEZs)

Offshore Banking Units (OBUs) shall be permitted in SEZs. Detailed
guidelines are being worked out by RBI. This should help some of our
cities emerge as financial nerve centres of Asia. Units in SEZ would be
permitted to undertake hedging of commodity price risks, provided such
transactions are undertaken by the units on stand-alone basis. This will
impart security to the returns of the unit.
It has also been decided to permit External Commercial Borrowings (ECBs)
for a tenure of less than three years in SEZs. The detailed guidelines will
be worked out by RBI. This will provide opportunities for accessing
working capital loan for these units at internationally competitive rates.

II- Employment oriented

Agriculture
• Export restrictions like registration and packaging requirement are
being removed today on Butter, Wheat and Wheat products, Coarse
Grains, Groundnut Oil and Cashew to Russia. Quantitative and
packaging restrictions on wheat and its products, Butter, Pulses,
grain and flour of Barley, Maize, Bajra, Ragi and Jowar have already
been removed on 5th March, 2002.
• Restrictions on export of all cultivated (other than wild) varieties of
seed, except Jute and Onion, removed.
• To promote export of agro and agro based products, 20 Agri export
zones have been notified.
• In order to promote diversification of agriculture, transport subsidy
shall be available for export of fruits, vegetables, floriculture, poultry
and dairy products. The details shall be worked out in three months.
• 3% special DEPB rate for primary & processed foods exported in
retail packaging of 1 kg or less.

b) Cottage Sector and Handicrafts

i) An amount of Rs. 5 crore under Market Access Initiative (MAI) has been
earmarked for promoting cottage sector exports coming under the KVIC.
ii) The units in the handicrafts sector can also access funds from MAI
scheme for development of website for virtual exhibition of their product.
iii) Under the Export Promotion Capital Goods (EPCG) scheme, these units
will not be required to maintain average level of exports, while calculating
the Export Obligation.
iv) These units shall be entitled to the benefit of Export House status on
achieving lower average export performance of Rs.5 crore as against Rs.
15 crore for others; and
v) The units in handicraft sector shall be entitled to duty free imports of an
enlarged list of items as embellishments upto 3% of FOB value of their
exports.

c) Small Scale Industry

With a view to encouraging further development of centres of economic
and export excellence such as Tirupur for hosiery, woollen blanket in
Panipat, woollen knitwear in Ludhiana, following benefits shall be available
to small scale sector:
i. Common service providers in these areas shall be entitled for facility of
EPCG scheme.
ii. The recognised associations of units in these areas will be able to
access the funds under the Market Access Initiative scheme for creating
focused technological services and marketing abroad.
iii. Such areas will receive priority for assistance for identified critical
infrastructure gaps from the scheme on Central Assistance to States
iv. Entitlement for Export House status at Rs. 5 crore instead of Rs. 15
crore for others.

d) Leather
Duty free imports of trimmings and embellishments upto 3% of the FOB
value hitherto confined to leather garments extended to all leather
products.

e) Textiles
i. Sample fabrics permitted duty free within the 3% limit for trimmings and
embellishments.
ii. 10% variation in GSM be allowed for fabrics under Advance Licence.
iii. Additional items such as zip fasteners, inlay cards, eyelets, rivets, eyes,
toggles, velcro tape, cord and cord stopper included in input output
norms.
iv. Duty Entitlement Passbook (DEPB) rates for all kinds of blended fabrics
permitted. Such blended fabrics to have the lowest rate as applicable to
different constituent fabrics.

f) Gem & Jewellery

i. Customs duty on import of rough diamonds is being reduced to 0%.
Import of rough diamonds is already freely allowed. Licensing regime for
rough diamond is being abolished. This should help the country emerge as
a major international centre for diamonds.
ii. Value addition norms for export of plain jewellery reduced from 10% to
7%. Export of all mechanised unstudded jewellery allowed at a value
addition of 3 % only. Having already achieved leadership position in
diamonds, now efforts will be made for achieving quantum jump on
jewellery exports as well.
iii. Personal carriage of jewellery allowed through Hyderabad and Jaipur
airport as well.

(III) Technology oriented

a) Electronic hardware
The Electronic Hardware Technology Park (EHTP) scheme is being
modified to enable the sector to face the zero duty regime under
ITA(Information Technology Agreement)
b) Chemicals and Pharmaceuticals
 • All pesticides formulations to have 65% of DEPB rate of such
pesticides.
• Free export of samples without any limit.
• Reimbursement of 50% of registration fees for registration of drugs.
c) Projects
Free import of equipment and other goods used abroad for more than one
year.

(IV) Growth Oriented

a) Diversification of markets
• Setting up of "Business Centre" in Indian missions abroad for visiting
Indian exporters/businessmen.
• ITPO portal to host a permanent virtual exhibition of Indian export
product.
b) North Eastern States, Sikkim and Jammu & Kashmir
Transport subsidy for exports to be given to units located in North East,
Sikkim and Jammu & Kashmir so as to offset the disadvantage of being far
from ports.
c) Re-location of industries
To encourage re-location of industries to India, plant and machineries
would be permitted to be imported without a licence, where the
depreciated value of such relocating plants exceeds Rs. 50 crores.

(V) Reduction in transaction time & cost

With a view to reducing transaction cost, various procedural
simplifications have been introduced. These include:
 HIGHLIGHTS OF EXIM POLICY, 2009-14 of India
Ministry of Commerce & Industry, Government of India

Technological Upgradation
To aid technological upgradation of our export sector, EPCG Scheme at
Zero Duty has been introduced. This Scheme will be available for
engineering & electronic products, basic chemicals & pharmaceuticals,
apparels & textiles, plastics, handicrafts, chemicals & allied products and
leather & leather products.

Jaipur, Srinagar and Anantnag have been recognised as ‘Towns of Export

Excellence’ for handicrafts; Kanpur, Dewas and Ambur have been
recognised as ‘Towns of Export Excellence’ for leather products; and
Malihabad for horticultural products.

Support for Green products and products from North East

Focus Product Scheme benefit extended for export of ‘green products’;
and for exports of some products originating from the North East.

Marine sector
Fisheries have been included in the sectors which are exempted from
maintenance of average EO under EPCG Scheme, subject to the condition
that Fishing Trawlers, boats, ships and other similar items shall not be
allowed to be imported under this provision. This would provide a fillip to
the marine sector which has been affected by the present downturn in
exports.

Gems & Jewellery Sector

• To neutralize duty incidence on gold Jewellery exports, it has now
been decided to allow Duty Drawback on such exports.

• In an endeavour to make India a diamond international trading hub,

it is planned to establish “Diamond Bourse”.
 • A new facility to allow import on consignment basis of cut &
polished diamonds for the purpose of grading/ certification purposes
has been introduced.

• To promote export of Gems & Jewellery products, the value limits of

personal carriage have been increased from US$ 2 million to US$ 5
million in case of participation in overseas exhibitions. The limit in
case of personal carriage, as samples, for export promotion tours,
has also been increased from US$ 0.1 million to US$ 1 million.

Agriculture Sector
To reduce transaction and handling costs, a single window system to
facilitate export of perishable agricultural produce has been introduced.
The system will involve creation of multi-functional nodal agencies to be
accredited by APEDA.

Leather Sector
Leather sector shall be allowed re-export of unsold imported raw hides
and skins and semi finished leather from public bonded ware houses,
subject to payment of 50% of the applicable export duty.
Tea
Minimum value addition under advance authorisation scheme for export
of tea has been reduced from the existing 100% to 50%.

Handloom Sector
To simplify claims under FPS, requirement of ‘Handloom Mark’ for availing
benefits under FPS has been removed.

Flexibility provided to exporters

• Payment of customs duty for Export Obligation (EO) shortfall under
Advance Authorisation / DFIA / EPCG Authorisation has been allowed
by way of debit of Duty Credit scrips. Earlier the payment was
allowed in cash only.

• Import of restricted items, as replenishment, shall now be allowed

against transferred DFIAs, in line with the erstwhile DFRC scheme.

• Time limit of 60 days for re-import of exported gems and jewellery

items, for participation in exhibitions has been extended to 90 days
in case of USA.

Simplification of Procedures
• To facilitate duty free import of samples by exporters, number of
samples/pieces has been increased from the existing 15 to 50.
Customs clearance of such samples shall be based on declarations
given by the importers with regard to the limit of value and quantity
of samples.
• To allow exemption for up to two stages from payment of excise
duty in lieu of refund, in case of supply to an advance authorisation
holder (against invalidation letter) by the domestic intermediate
manufacturer. It would allow exemption for supplies made to a
manufacturer, if such manufacturer in turn supplies the products to
an ultimate exporter. At present, exemption is allowed upto one
stage only.

• Greater flexibility has been permitted to allow conversion of

Shipping Bills from one Export Promotion scheme to other scheme.
Customs shall now permit this conversion within three months,
instead of the present limited period of only one month.

• To reduce transaction costs, dispatch of imported goods directly

from the Port to the site has been allowed under Advance
Authorisation scheme for deemed supplies. At present, the duty free
imported goods could be taken only to the manufacturing unit of the
authorisation holder or its supporting manufacturer.

• Disposal of manufacturing wastes / scrap will now be allowed after

payment of applicable excise duty, even before fulfillment of export
obligation under Advance Authorisation and EPCG Scheme.

• Regional Authorities have now been authorised to issue licences for

import of sports weapons by ‘renowned shooters’, on the basis of
NOC from the Ministry of Sports & Youth Affairs. Now there will be
no need to approach DGFT(Hqrs.) in such cases.

• The procedure for issue of Free Sale Certificate has been simplified
and the validity of the Certificate has been increased from 1 year to
2 years. This will solve the problems faced by the medical devices
industry.

• Automobile industry, having their own R&D establishment, would be

allowed free import of reference fuels (petrol and diesel), upto a
maximum of 5 KL per annum, which are not manufactured in India.

• Acceding to the demand of trade & industry, the application and

redemption forms under EPCG scheme have been simplified.